OpenAI must transition to a for-profit company by the end of the year to secure the full $40 billion funding led by SoftBank, according to a source familiar with the matter. If OpenAI, backed by Microsoft, fails to restructure by the deadline, SoftBank may reduce the funding round to $20 billion.
This deadline accelerates OpenAI's timeline for what is expected to be a complicated transition, which was originally under a two-year timeframe from its previous financing round with investors. The startup has stated that this transition is essential to secure the capital needed for developing advanced AI models. OpenAI has not responded to requests for comment.